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In an irrigated multi-crop production system, farmers make decisions on the land allocated to each crop, and the subsequent irrigation water application, which determines the crop yield and irrigation water use efficiency. This study analyzes the effects of the multiple factors on farmers’ decision making and economic irrigation water use efficiency (EIWUE) using a national dataset from the USDA Farm and Ranch Irrigation Survey. To better deal with the farm-level data embedded in each state of the U.S., multilevel models are employed, which permit the incorporation of state-level variables in addition to the farm-level factors. The results show higher costs of surface water are not effective in reducing water use, while groundwater costs show a positive association with water use on both corn and soybean farms. The adoption of pressure irrigation systems reduces the soybean water use and increases the soybean yield. A higher EIWUE can be achieved with the adoption of enhanced irrigation systems on both corn and soybean farms. A high temperature promotes more the efficient water use and higher yield, and a high precipitation is associated with lower water application and higher crop yield. Intraclass correlation coefficients (ICC) suggest a moderate variability in water application and EIWUE is accounted by the state-level factors with ICC values greater than 0.10.